Pakistan Records Highest-Ever Monthly IT Exports in December 2024 Despite Internet Issues

Pakistan recorded the highest-ever monthly IT exports of US$ 348 million, up by 15 percent YoY while also up by 12 percent MoM in December 2024. These monthly IT exports in December 2024 are higher than the last 12-month average of US$ 299 million. This is the 15th consecutive month of YoY IT export growth, starting from October 2023, according to Topline Securities. This takes 1HFY25 IT exports to US$ 1.86 billion, up by 28 percent YoY. Export proceeds per day were recorded at US$ 16.6 million for December 2024 vs. US$ 14.8 million in November 2024. YoY jump in IT exports is due to: Pakistani IT companies are active in engaging with global clients. Recently leading IT companies in Pakistan attended Oslo Innovation Week 2024, and the Pak-US Tech Investment Conference. According to a Pakistan Software Houses Association (P@SHA) survey, 62 percent of IT companies are maintaining specialized foreign currency accounts. A major development in FY25 was SBP adding a new category of Equity Investment Abroad (EIA), specifically for export-oriented IT companies. IT exporters can now acquire interest (shareholding) in entities abroad utilizing up to 50 percent proceeds from specialized foreign currency accounts. This development will further boost the confidence of IT exporters to remit proceeds back to Pakistan. Net IT Exports (Exports-Imports) displayed a monthly number of US$ 222 million and decreased by 16 percent YoY in December 2024. These net IT export numbers in December 2024 are lower than the last 12-month average of US$ 265 million. The IT sector will likely continue its growth trajectory and momentum with likely growth of 10- 15 percent for FY25 to US$ 3.5-3.7 billion. Under the ‘Uraan Pakistan’ national economic plan government has set a target of US$ 10 billion in IT exports by FY29. This implies a target CAGR of 28 percent till FY29. Within the IT sector, Systems Limited (SYS) is Topline’s preferred pick. SYS is currently trading at 2024E and 2025F PE of 15.3x and 11.4x, respectively.